Never beloved, even among the pro-European Ukrainians who live in the country’s western regions and who resent Russian interference within their borders, Yatsenyuk’s goal since the fall of former president Viktor Yanukovych, an ally of Russian president Vladimir Putin, has been rightsizing an economy that’s underperformed even by standards of the region, with growth rates dwarfed by authoritarian Belarus, a Russian ally that’s retained Soviet institutions.
Facing few good options, Yatsenyuk simply gave up, hoping that, perhaps, the resignation of Ukraine’s last ‘true believer’ might shake loose enough support for the economic reforms that Ukraine desperately needs to continue its financial lifeline from the International Monetary Fund. Ironically, though Yatsenyuk has personally advocated liberalizing reforms and anti-corruption measures for years, his government is now seen as incapable of delivering reforms and as incorrigibly corrupt.
Yatsenyuk must now know how former Indian prime minister Manmohan Singh surely felt after a decade in office (if not quite in power).
It’s not even the first time the pressured premier resigned. His resignation in July 2014 paved the way for fresh parliamentary elections in October 2014 that restored a majority for a pro-western, pro-European government that was ultimately headed by Yatsenyuk.
But his fresh resignation came two months after Ukraine’s president Petro Poroshenko, a former chocolate magnate and businessman with interests across Russia and the post-Soviet world, demanded his resignation in February. Economy minister Aivaras Abromavičius, a well-known reformer, resigned abruptly in February, accusing both the government and officials close to Poroshenko of massive corruption. It didn’t help that last weekend, Poroshenko himself was implicated in the ‘Panama Papers’ leak of individuals with offshore accounts.
With an illustrious career of service, first as foreign minister throughout 2007 under former president Viktor Yushchenko (of ‘Orange Revolution’ fame), then as chairman of the Верховна Рада (Verkhovna Rada), Ukraine’s unicameral parliament until 2008, he was a natural choice to guide Ukraine’s post-Yanukovych government in February 2014. But Yatsenyuk knew from the outset that the chances for economic and policy success were grim.
The country’s economy contracted by around 10% in 2015, followed a nearly 6.5% contraction in 2014, as a paralyzed country suffered through an open-fire attack on protesters in Maidan Square in Kiev, the abrupt resignation and exile of Yanukovych, Russia’s lightning-speed annexation of Crimea and a still-simmering proxy war with Russia over the eastern Ukrainian oblasts of Donetsk and Luhansk.
For now, no one knows what exactly will happen with Ukraine’s new government. Yatsenyuk angrily denounced Poroshenko and the cronies surrounding Ukraine’s new president. For his part, Poroshenko certainly doesn’t want to call fresh elections, because his supporters and the Yatsenyuk-led ‘People’s Front’ (Народний фронт) still control a majority of the seats in Ukraine’s parliament. That outcome wouldn’t be certain in a snap vote.
The 38-year old speaker of the Verhhovna Rada, Volodymyr Groysman, a former mayor of Vinnytsia, Poroshenko’s homeotwn, and a former minister for regional development, was set to become the next prime minister with Poroshenko’s blessing. Yet he has struggled to form a new government, and his efforts appeared to have stalled Monday, a blow to Poroshenko.
Reformists like Yatsenyuk’s finance minister, the American-born Natalie Jaresko, a Chicago-trained economist, have said they will take no part in a Groysman government. If Groysman fails, Poroshenko may yet turn to Jaresko, who commands the support of the international community and the IMF. In particular, Jaresko might ultimately become Kiev’s best hope as prime minister — playing the Paul Ryan to Groysman’s Kevin McCarthy.
The musical chairs in Kiev comes after a vote last week in The Netherlands, where voters rejected a standard association agreement between the European Union and Ukraine that, in essence, is already being implemented. Though it’s somewhat odd that Dutch nationalists engineered a goofy vote on EU engagement with Ukraine, nearly 61.6% of the electorate voted against the agreement, despite the support of the government headed by center-right, liberal prime minister Mark Rutte. As it was a non-binding vote, nothing will necessarily change EU-Ukrainian relations, but it’s a reminder to EU elites that member-states (and their angry electorates) aren’t excited about unlimited funds to countries within the post-Soviet periphery (and aren’t excited about ever closer union). Functionally, the Dutch vote closed the door on any fast-track Ukrainian membership in NATO.
In the wake of the Dutch vote, Yatsenyuk’s scalp was a perhaps necessary, if not sufficient, sacrifice. A Groysman-led government might only lead to more discord between the corrupt pro-western forces (now personified by Groysman and even Poroshenko himself) and the reformist pro-western forces (personified by Jaresko). Despite its fresh start, a government of Poroshenko loyalists will have an even tougher time convincing a skeptical Europe and IMF to providing the kind of long-term economic lifeline that Ukraine now needs.
Unfortunately for all of them, there are still plenty of hard-right politicians from western Ukraine and pro-Russian politicians in the east.
Poroshenko and his next prime minister will be working against the clock. If forced into snap elections, they might lose power to right-wing, nationalist forces — groups like Правий сектор (Right Sector) — that provided the muscular protection to the Maidan protests, but who have also been eased out of government roles since mid-2014. The hard right’s rise would almost certainly inflame greater tensions with Moscow and might end what is now a tentative ceasefire with eastern, Russian-back rebels.